Yesterday, AirMedia Group announced its board of directors has approved an investment agreement between various entities affiliated with the company, including Beijing GreatView Media Advertising Co. Ltd., which is the main operating entity of AirMedia's gas station media network, the entity's current shareholders, and Elec-Tech International Co. Ltd. In accordance with the investment agreement, Elec-Tech will invest RMB640 million ($104 million U.S.) to purchase ordinary shares representing around 21.27% of GreatView Media's equity interest. Following completion of the transaction, AirMedia will indirectly control 61.41% of the equity interest of GreatView Media.
In order to further develop its existing gas station media network, AirMedia plans to install LED screens in its gas stations throughout China. The company's current shareholders elected to use the full amount of Elec-Tech's investment to purchase LED screens from Elec-Tech, or its subsidiaries, for these installations.
"We are excited about our partnership with Elec-Tech, which enables us to explore the great potential and brilliant prospects of LED screen advertising in our gas station media network," said AirMedia Chairman and CEO Herman Guo. "We believe putting LED screens in our gas station media network is the right step to not only turn around this product line but also to maximize the tremendous value of this network. We expect the introduction of our new partner, Elec-Tech, to bring not only affirmation of the value that we believe the new LED format will add to our gas station media network, but also additional technical expertise in electronic display."
"We believe AirMedia's gas station media network is a very unique nationwide network to reach car drivers and car owners, one of the most affluent groups in China," added Elec-Tech Chairman Donglei Wang. "With the enhancement provided by our LED screens, this influential network will have more capacity to fulfill advertisers' demand and create more economic value. We believe our partnership with AirMedia is prudent and will bring great returns for our shareholders."
This investment is subject to Elec-Tech shareholder approval.
A leading operator of out-of-home advertising platforms in China, AirMedia Group's efforts target middle to high-end consumers. The company runs China's largest air travel advertising-dedicated digital media network, operating digital frames and digital television screens in 34 major airports, including the majority of China's 30 largest airports. AirMedia also sells advertisements along the routes of seven airlines, including the four largest airlines in China. The company additionally operates traditional media platforms, including billboards, light boxes, mega LED screens, and other digital media, in selected major airports. AirMedia has obtained exclusive contractual concession rights to develop and operate outdoor advertising platforms at Sinopec's service stations throughout China through the end of 2014.
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